lOMoARcPSD|22466751
iiiii Bank Management
& Financial
Services
iNinth Edition
iPeter S. Rose
iiiiiiiiiii Texas A i&i M University ii
iSylvia C. Hudgins
iiiiiiiiiii Old Dominion University iii
, lOMoARcPSD|22466751
BANK MANAGEMENT & FINANCIAL SERVICES, NINTH EDITION
Published by McGraw-Hill, a business unit of The McGraw-Hill Companies, Inc., 1221 Avenue of the
Americas, New York, NY 10020. Copyright © 2013 by The McGraw-Hill Companies, Inc. All rights reserved.i
Printed in the United States of America. Previous editions © 2010, 2008, and 2005. No part of this publication
may be reproduced or distributed in any form or by any means, or stored in a database or retrieval system,i
without the prior written consent of The McGraw-Hill Companies, Inc., including, but not limited to, in any
network or other electronic storage or transmission, or broadcast for distance learning.
Some ancillaries, including electronic and print components, may not be available to customers outside the
United States.
This book is printed on acid-free paper.
1 2 3 4 5 6 7 8 9 0 QDB/QDB 1 0 9 8 7 6 5 4 3 2
ISBN: 978-0-07-803467-1
MHID: 0-07-803467-1
Vice President & Editor-in-Chief: Brent Gordon
Vice President of Specialized Publishing: Janice M. Roerig-Blong
Publisher: Douglas Reiner
Sponsoring Editor: Daryl Bruflodt
Marketing Coordinator: Colleen P. Havens
Development Editor: Darlene M. Schueller
Project Manager: Jolynn Kilburg
Design Coordinator: Brenda A. Rolwes
Cover Designer: Studio Montage, St. Louis, Missouri
Cover Image:i© Eyewire (Photodisc) PunchStock RF
Buyer: Susan K. Culbertson
Media Project Manager: Balaji Sundararaman
Compositor: Laserwords Private Limited
Typeface: 10/12 GoudyStd-Roman
Printer: Quad/Graphics
The photo on the front cover is that of the Marriner Eccles Building, headquarters of the Federal Reserve Board.
Library of Congress Cataloging-in-Publication Data
Rose, Peter S.
i i Bank management & financial services / Peter S. Rose, Sylvia C. Hudgins.—9th ed.
i i i p. cm.
i i Includes index.
i i ISBN 978-0-07-803467-1 (alk. paper)
i i 1.i Financial institutions—United States. 2.i Bank management—United States. 3.i Financial services
industry—United States. 4.i Banks and banking, International. I. Hudgins, Sylvia Conway, 1956-II. Title.i
III. Title: Bank management and financial services.
iii HG181.R65 2013
iii 332.1068—dc23 2011039373
www.mhhe.com
, lOMoARcPSD|22466751
iiiii To my wife Kandy and our family.....
Robert, Michael and Melissa, and Jason and Janet.i
i—Peter S. Rose
To my cousins, especially, Catharine Ann
Bender (1940 to 2011) and Bob Bender
(1939 to 2010).i
i—Sylvia C. Hudgins iiii
Downloaded by ChuXuan MA ()
, lOMoARcPSD|22466751
About the Authors
i Peter S. Rose i
Peter S. Rose is Professor Emeritus in Finance from Texas A&M University where he
taught and conducted research for approximately 30 years and held the Blocker Chair of
Business Administration until his recent retirement. Before his career at A&M he served
as a financial economist with the Federal Reserve System. Rose has served as author and
consultant to a variety of financial institutions. He has published more than 200 articles
in journals and proceedings in the United States, Canada, Great Britain, France, Brazil,i
India, Mexico, and other nations. He has been an author, coauthor, or editor for numer-
ous books, including Bank
i Management and Financial Services i(McGraw-Hill/Irwin), coau-
thored with Sylvia C. Hudgins and now entering its ninth edition;i Money and Capital
Marketsi(McGraw-Hill/Irwin), coauthored with Milton H. Marquis and in its eleventh
edition;ii Financial Institutions,i
i a coauthored text published by Richard D.i Irwin,i which
passed through five editions;i Banking across State Lines i(published by Quorum TheBooks);ii
Changing Structure of American Banking i(published by Columbia University Press); and
Japanese Banking and Investment in the United States i(also from Quorum Books). Several of
these books have been translated into Chinese, Russian, Polish, and other languages and
are used in classrooms around the globe. Rose’s principal outside interests include classical
music and training golden retrievers.i
iSylvia C. Hudgins
Sylvia C.i Hudgins is a Professor of Finance at Old Dominion University in Norfolk,i
Virginia,i where she teaches classes in banking,i financial institutions,i and corporate
finance. Her doctorate is from Virginia Tech. Yes, she is Virginian-born and raised in
the Commonwealth. Much of her research focuses on the empirical analysis of commer-
cial banks and thrifts. She examines questions concerning management, regulation, and
legislation of financial institutions. The journals publishing her research include Journal
of Money, Credit, and Banking;ii Financial Management;ii Journal of Financial Economics;i and
Economic Inquiry.i Professionally she has served as director of both the Eastern Finance
Association and the Southern Finance Association and as a member on the Board of
Editors for the Financial Management Association’s Survey and Synthesis Series. In the
community, she is treasurer and a member of the Board of Directors of the Old Domin-
ion University Credit Union, where she sees the “real-world” side of the management of
financial institutions.ii
iv
iiiii Bank Management
& Financial
Services
iNinth Edition
iPeter S. Rose
iiiiiiiiiii Texas A i&i M University ii
iSylvia C. Hudgins
iiiiiiiiiii Old Dominion University iii
, lOMoARcPSD|22466751
BANK MANAGEMENT & FINANCIAL SERVICES, NINTH EDITION
Published by McGraw-Hill, a business unit of The McGraw-Hill Companies, Inc., 1221 Avenue of the
Americas, New York, NY 10020. Copyright © 2013 by The McGraw-Hill Companies, Inc. All rights reserved.i
Printed in the United States of America. Previous editions © 2010, 2008, and 2005. No part of this publication
may be reproduced or distributed in any form or by any means, or stored in a database or retrieval system,i
without the prior written consent of The McGraw-Hill Companies, Inc., including, but not limited to, in any
network or other electronic storage or transmission, or broadcast for distance learning.
Some ancillaries, including electronic and print components, may not be available to customers outside the
United States.
This book is printed on acid-free paper.
1 2 3 4 5 6 7 8 9 0 QDB/QDB 1 0 9 8 7 6 5 4 3 2
ISBN: 978-0-07-803467-1
MHID: 0-07-803467-1
Vice President & Editor-in-Chief: Brent Gordon
Vice President of Specialized Publishing: Janice M. Roerig-Blong
Publisher: Douglas Reiner
Sponsoring Editor: Daryl Bruflodt
Marketing Coordinator: Colleen P. Havens
Development Editor: Darlene M. Schueller
Project Manager: Jolynn Kilburg
Design Coordinator: Brenda A. Rolwes
Cover Designer: Studio Montage, St. Louis, Missouri
Cover Image:i© Eyewire (Photodisc) PunchStock RF
Buyer: Susan K. Culbertson
Media Project Manager: Balaji Sundararaman
Compositor: Laserwords Private Limited
Typeface: 10/12 GoudyStd-Roman
Printer: Quad/Graphics
The photo on the front cover is that of the Marriner Eccles Building, headquarters of the Federal Reserve Board.
Library of Congress Cataloging-in-Publication Data
Rose, Peter S.
i i Bank management & financial services / Peter S. Rose, Sylvia C. Hudgins.—9th ed.
i i i p. cm.
i i Includes index.
i i ISBN 978-0-07-803467-1 (alk. paper)
i i 1.i Financial institutions—United States. 2.i Bank management—United States. 3.i Financial services
industry—United States. 4.i Banks and banking, International. I. Hudgins, Sylvia Conway, 1956-II. Title.i
III. Title: Bank management and financial services.
iii HG181.R65 2013
iii 332.1068—dc23 2011039373
www.mhhe.com
, lOMoARcPSD|22466751
iiiii To my wife Kandy and our family.....
Robert, Michael and Melissa, and Jason and Janet.i
i—Peter S. Rose
To my cousins, especially, Catharine Ann
Bender (1940 to 2011) and Bob Bender
(1939 to 2010).i
i—Sylvia C. Hudgins iiii
Downloaded by ChuXuan MA ()
, lOMoARcPSD|22466751
About the Authors
i Peter S. Rose i
Peter S. Rose is Professor Emeritus in Finance from Texas A&M University where he
taught and conducted research for approximately 30 years and held the Blocker Chair of
Business Administration until his recent retirement. Before his career at A&M he served
as a financial economist with the Federal Reserve System. Rose has served as author and
consultant to a variety of financial institutions. He has published more than 200 articles
in journals and proceedings in the United States, Canada, Great Britain, France, Brazil,i
India, Mexico, and other nations. He has been an author, coauthor, or editor for numer-
ous books, including Bank
i Management and Financial Services i(McGraw-Hill/Irwin), coau-
thored with Sylvia C. Hudgins and now entering its ninth edition;i Money and Capital
Marketsi(McGraw-Hill/Irwin), coauthored with Milton H. Marquis and in its eleventh
edition;ii Financial Institutions,i
i a coauthored text published by Richard D.i Irwin,i which
passed through five editions;i Banking across State Lines i(published by Quorum TheBooks);ii
Changing Structure of American Banking i(published by Columbia University Press); and
Japanese Banking and Investment in the United States i(also from Quorum Books). Several of
these books have been translated into Chinese, Russian, Polish, and other languages and
are used in classrooms around the globe. Rose’s principal outside interests include classical
music and training golden retrievers.i
iSylvia C. Hudgins
Sylvia C.i Hudgins is a Professor of Finance at Old Dominion University in Norfolk,i
Virginia,i where she teaches classes in banking,i financial institutions,i and corporate
finance. Her doctorate is from Virginia Tech. Yes, she is Virginian-born and raised in
the Commonwealth. Much of her research focuses on the empirical analysis of commer-
cial banks and thrifts. She examines questions concerning management, regulation, and
legislation of financial institutions. The journals publishing her research include Journal
of Money, Credit, and Banking;ii Financial Management;ii Journal of Financial Economics;i and
Economic Inquiry.i Professionally she has served as director of both the Eastern Finance
Association and the Southern Finance Association and as a member on the Board of
Editors for the Financial Management Association’s Survey and Synthesis Series. In the
community, she is treasurer and a member of the Board of Directors of the Old Domin-
ion University Credit Union, where she sees the “real-world” side of the management of
financial institutions.ii
iv
